Malaysia to form task force to review capital market efficiency

Kuala Lumpur Malaysia said it will form a task force to boost the efficiency of its capital markets as private investment rises and companies plan bigger share sales.

It plans to increase support for small- and medium-size businesses, expand a compensation fund for securities investors, and give tax incentives to companies hiring graduates and women re-entering work, Prime Minister Najib Razak said.

"I am shifting my focus to the question of competitiveness," Najib said in a speech in Kuala Lumpur yesterday. This is "to eliminate sticking points and to ensure that issuers, intermediaries and investors have access to an efficient, effective and facilitative marketplace."

Malaysia's financial system, including outstanding bonds, loans and equity-market capitalisation, may grow an annual pace of 8-11 per cent to 9.1 trillion ringgit (Dh10.43 billion) by 2020, the central bank forecast on December 22.

Petronas Chemicals Group raised a record 12.8 billion ringgit in an initial public offering in 2010, while plantations group Felda Global Ventures Holdings may raise as much as $3.3 billion (Dh12.1 billion) in its IPO, two people familiar with the matter said on April 27.

The capital markets taskforce will be headed by Ahmad Husni Mohammad Hanadzlah, Malaysia's second finance minister, said the prime minister, who is also the country's first finance minister.

‘Increasingly attractive'

Malaysia announced private investment plans Tuesday worth a total 20.5 billion ringgit, as Southeast Asia's third biggest economy bolsters growth amid Europe's debt crisis.

"I think it's fair to say that Malaysia is becoming an increasingly attractive destination for investors," Najib said Tuesday.

Najib has sought to boost investment as he strives to shore up confidence in the government ahead of elections due by early 2013, unveiling in 2010 an Economic Transformation Programme that identified $444 billion of private-sector-led projects for the current decade.

Malaysia is set to hit a foreign-direct-investment target of 33 billion ringgit this year, International Trade and Industry Minister Mustafa Mohammad said yesterday.

Malaysia's economic growth slowed last quarter as the protracted European debt crisis sapped demand for its exports. Gross domestic product rose 4.7 per cent in the three months through March from a year earlier, after expanding 5.2 per cent in the previous quarter, the central bank said on May 23.